World Turned Upside Down

Or at least the S & P 500 Index...

One of my occasional twisted exercises is to look at a market from a different perspective. That is, from standing on my head! So I offer the following chart, as well as my musing that the current environment is similar to late 2006/early 2007. We have numerous non-confirmations and waning upside momentum. That era produced a fairly sharp sell-off followed by a recovery to new highs later in the year. Something very broadly along those lines could be in the offing for 2010. Of course, at that time, the stock market was not below the "water line", or its long term moving average. And of course, the world looked quite a bit different with falling real estate values, interest rates poised to rise and a pile of bad debts to be worked through... Now that I look at it again, the broad brush strokes may be painting a similar picture, but don't be surprised if it all takes shape much more quickly than it did before.